Notifications & Messages

Hey - It’s time to join the thousands of other dealer professionals on DrivingSales. Create an account so you can get full access to the articles, discussions and people that are shaping the future of the automotive industry.

Year-End Bonuses? Another Year. Another Check Written.

You get a bonus. He Gets a Bonus. She Gets a Bonus. We All Get Bonuses? It is not uncommon for the sales consultant to receive a year-end bonus based on the volume of their sales, which does not sound bad, right? As for the volume of the bonus, I have seen $2.50 per unit under 125 units sold and as much as $7.50 per unit for those above 250. The bonus was then paid in December. So what is exactly wrong with this bonus structure?

There is nothing wrong with bonusing your sales consultants for their hard work. However, when it came to the top dogs, they would usually take it easy in December knowing that they were about to receive a huge payout. Knowing that selling a few more units was not that much more money. If a dealer is counting on those few sales consultants to carry their December, it might not work out. For those who did not sell as many units, less than ten a month, the bonus was not necessarily warranted; especially if the sales consultant did not have the best CSI scores, which can cost the dealership thousands of dollars.

That said, here are some of the top concerns, and alternative approaches that are not only beneficial to the sales consultant but also the dealership.

What About the BDC Managers/Marketing Directors? Where is their Bonus?

I get that BDC Managers or Marketing Directors are seen as overhead - the idea that they do not physically sell the unit. However, that does not mean that they, too, do not deserve a bonus. After all, the BDC Managers are the ones managing the CRM, vendor accounts, phone calls, appointments, etc. A $1,200 to $1,500 can go a long way. Not just for the overall morale, but it will also encourage them to start the new year off on a strong start. We tend to forget how much work they do on a daily basis. Not to mention, all of the extra things they do that - in so many cases - goes unnoticed.

Sales Managers? I Know Results Are Expected. But They Deserve A Year-End Bonus.

In our industry, it is not uncommon for the sales consultant to earn more than their managers, which seems odd; however, is warranted depending on the situation. That does not mean that your sales managers do not deserve a bonus. One of the ways to approach this issue is by giving the managers a year-end bonus if they have hit their objectives. The objectives could be KPI’s that are well thought out, and in alignment with the dealership's goals. However, in many cases, the dealership's goals - for bonuses - are so unrealistic to the point where they will continually change the pay plan if they believe their manager or staff is making to much money. You might not think that happens, but it happens far more than you would think or want to admit. Where the dealer would rather run the risk of losing a solid employee than pay a decent living. It's a vicious cycle that can have a detrimental impact to a dealers bottom line.

The Bonus Can Be Tied to Personal Goals Too!

Selling units are the primary goal. We get that. However, there is more to selling units than the physical act of doing so. In fact, the more connected the employee or manager is to the dealership the better their results will be. Instead of focusing a bonus on a number focus it on the bigger picture. That is their performance. If there are specific areas in the dealership that need focus or attention align their bonus with the task at hand. In doing so, it will encourage them to take on the extra work-load. In doing so, it not only builds their experience, but it also has a positive effect on the dealership.

Bottom line: it is easy to cut a check based on units sold without thinking twice. However, there is more to bonuses than simply stroking a check. Not to mention, there is other essential personnel that does not get the credit they deserve, and while $1,200 - $1,500 does not seem like a lot of money, it can go a long way in not just boosting your dealer's morale, but encouraging them to continue to go the extra mile. So instead of just stroking the same check year after year work with each employee and design a bonus plan that makes sense for both them and the dealership.

How to does your dealership handle year-end bonuses? Does your BDC Manager or Marketing Director Get a Bonus?